Herrera-Dy warned that this ERC
decision allowed Meralco to enter into power supply agreements with its sister
generation companies and affiliates, thus, may result in predatory power rates
for up to 25 years that is grossly disadvantageous to consumers.

‘The CSP requirement was designed to
lower power rates by subjecting power supply contracting to competitive
bidding,” said Herrera-Dy.

“But when the ERC postponed the
competitive selection process for power supplies in December, 2015, it
effectively allowed Meralco to lock consumers into self-dealing contracts with
its sister companies for up to 25 years,” she stated.

Deputy Speaker Gwendolyn Garcia
agreed with Herrera-Dy’s views.

During the joint hearing conducted
by the House Committees on Good Government, Public Accountability and Energy
last Monday, it was gathered that on November 6, 2015, the Department of Energy
(DOE) and the ERC ordered distribution utilities to conduct competitive
biddings to prevent the charging of self-negotiated generation rates and thus
lower power costs to benefit consumers.

ERC allegedly delayed the
implementation of the DOE circular for at least five months, giving Meralco the
chance of cornering the lion’s share of 3,551MW out of the 4,500MW in aggregate
supply covered by all the 93 PSA (power supply agreement) applications filed
with the ERC during the extension period.

Reports have indicated that Meralco
was able to secure the 3,551MW supply through just seven agreements it
negotiated with its own power generation companies and affiliates. The
remaining 86 PSAs covered less than 1,000MW, triggering suspicions that the
Meralco contracts were sweetheart deals.

Meanwhile, Bayan Muna Rep. Carlos
Zarate said the ERC move to extend the implementation of the competitive
bidding circular denied consumers the benefit of competition and exposed them
to potentially overpriced contracts between Meralco and its own generation
companies.

Zarate said the seven contracts
entered into by Meralco and its affiliated generation companies are clearly
“midnight contracts” since they were signed only four days before the new
deadline set by the ERC on April 30, 2016 to conduct competitive supply
biddings.